by David Drake
The UK has recently been making strides in the cryptocurrency market. Earlier in the year, the UK treasury committee launched an inquiry into cryptocurrencies to determine how they would impact businesses and investors. In another significant move, the UK government developed its Fintech Sector Strategy (FSS) that factors crypto-assets and launched it on March 22nd 2018.
As part of its strategy, the government is establishing a crypto-asset task force in order to tap into the potential benefits of blockchain technology while protecting itself from potential risks.
According to Dr. Navjit Dhaliwal, the CEO at Iagon, the recent move by the UK government points to strategic positioning of the country as a global Fintech leader. In his opinion, the country recognizes that the underlying technology behind cryptocurrencies will revolutionize the financial sector of the world.
“With the United Kingdom’s decision to launch its FSS focusing on the establishment of a crypto-assets task force, the country is undoubtedly looking to place itself ahead of the curve when it comes to the underlying blockchain technology that is poised to revolutionize the way that we handle finances around the globe.” he says.
According to Tristan Chaudhry, CEO of Fry Egg, this indicates that the country is preparing to welcome blockchain technology: “The UK has taken the first step in embracing crypto-assets and the myriad of benefits they bring to the global economy. Time will prove this was a wise choice.” he says.
Regulation is key
To maximize blockchain technology, the UK government has included regulatory measures in the strategy by providing for the establishment of industry standards and pilot schemes, which will ensure that fintech institutions’ partnerships comply with existing regulations.
According to Benny Phang, the Chief Strategic Officer at Fanfare Global, regulation is an important aspect of strengthening the fintech industry. He says: “A well-balanced regulatory structure will sieve out genuine blockchain projects from scammers, safeguard against risks and allow good projects to mature in a nurturing environment. All the stakeholders in the blockchain ecosystem will also benefit from hard-working entrepreneurs who hope to create beneficial blockchain-powered firms to enthusiastic users and investors who support these projects.”
The establishment of a crypto-asset taskforce by the UK government came a few days after global economic leaders concluded the G20 summit. During the summit, leading global economies acknowledged that the technological innovation behind cryptocurrencies can enhance efficiency in financial systems and improve inclusiveness in the global economy.
But will other countries follow in UK’s footsteps? Dr. Dhaliwal thinks so: “It would be my opinion that other countries will develop similar strategic planning methods in order to reinforce their overall position in the global financial sector. This will allow them to improve their country’s own economy as well as the evolving efficiency of their financial systems.”
On his part, Chaudhry feels countries will not be far behind: “Cryptocurrencies and blockchain-based companies are the future, and I predict many other European countries will follow the lead of the UK and adopt some form of cryptocurrency legislation.” he says.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.